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Project Brief

Geothermal Development Partners ForumRoseau, September 26 – 27, 2013

Theme: Geothermal Energy, the Major Game Changer

Introduction: The Government of the Commonwealth of Dominica recently completed the exploratory drilling and testing of three (3) geothermal wells on June 27, 2012 on the Wotten Waven – Laudat Geothermal Field in the Roseau Valley.

The Exploratory Drilling Project began in October, 2009 with the setting up of the Geothermal Project Management Unit and the awarding of a technical assistance contract to the consulting firm of Electroconsult (ELC) of Italy. The main purpose of that project was to prove the quality (geochemical, geophysical, geological and geotechnical) and the extent of the geothermal resource in the Roseau Valley (Wotten Waven – Laudat). The project cost $31.75 million Eastern Caribbean Dollars equivalent to $11.98 million United States Dollars and was jointly funded by the Agence Francaise de Development (AFD), the European Union (EU) and the Government of the Commonwealth of Dominica (GoCD). The extent and distribution of contribution by the said agencies are as follows:

Having successfully completed the drilling and testing of three exploratory wells and proven the existence of a viable geothermal resource the Government of the Commonwealth of Dominica (GoCD) is now seeking to develop a 15 megawatt Small Geothermal Power Plant (SGPP) within the Roseau Valley Geothermal field. Meantime, the Government has taken significant steps to advance geothermal development, having signed a contract with Iceland Drilling Company (IDC) in December, 2012 to drilling two full-size geothermal wells, one production well (Laudat) and one reinjection well (Lily Valley), within the Roseau Valley geothermal reservoir in September-October, 2013. During that time additional monitoring and testing will be undertaken for further confirmation of the resource thereby enhancing the bankability of the development to private investors. The diagram below illustrates the appreciable drop in the project risk profile as we move steadfastly into the production drilling phase..To date Government has been the main developer in the exploratory phase of project and is confident that on successfully seeing the development through the risker stages it will be easier to generate the necessary private sector participation in the 15 MW domestic plant development and investment in large-scale 100-120 MW geothermal generation facilities.

The Geothermal resource development in Dominica is a national priority as it is an integral part of the country’s Growth and Social Protection Strategy (GSPS). Dominica’s economic growth is intimately linked to the energy sector, and getting a handle on the high cost of electricity is essential for improving its comparative advantage and business competitiveness as well as the lives of ordinary citizens.

Background: It has been long proven elsewhere that geothermal energy can also serve as a reliable, non-intermittent source of power generation that can cost less than presently available alternatives. It can also serve as a natural hedge against the volatility of internationally priced petroleum fuels, and enhance energy security through the use of domestic resources.

Some preliminary estimates suggest that geothermal power potential in Dominica could be as much as 1,400 MW (Huttrer, 1998), which is among the largest in the region. This presents both a challenge and an opportunity since on one hand; the resource potential is too large to be exploited at any significant scale solely for domestic use. Notwithstanding, there is the ‘perfect’ opportunity to sell electricity to our neighboring French Territories, most of which are dealing with similarly high cost electricity given the limited availability of alternate power generation options. Therefore Dominica stands to benefit greatly by becoming a regional energy hub.

Geothermal based electricity is expected to provide a cheaper and more affordable alternative to the current utilization of imported costly diesel, which is undermining and stifling growth since with 66 percent of businesses citing electricity as a major constraint in a 2010 Enterprise Survey.

In these regards, and to strategize for the sustainable and effective investment in, and for the commercialization of the geothermal energy resource, Cabinet sanctioned the convening in Dominica of a Forum of Development Partners for Geothermal Energy Development in Dominica to be held during the period, September 26 – 27, 2013.

Objective of the Forum

The objectives of the Forum are as follows:

To promote the viability of the geothermal energy development in the Roseau Valley and to foster greater widespread participation from development partners and other key stakeholders.

To broaden the awareness of the geothermal resources development programme in the Roseau Valley and to improve the understanding of the Government’s approach to said development.

To facilitate more comprehensive sharing of information on the geothermal development framework and investment environment in terms of the institutional strength, regulatory structure, legislative regime (Electricity Supply Act, Geothermal Resources Development Bill) and technology/knowledge transfer.

To build strong support and consensus for the Dominica Geothermal Energy Programme as a model to catalyse clean and sustainable economic growth.

To mobilize the right financial and technical resources in order to realize the feasible socio-economic prospect of the Dominica Geothermal Energy Programme.

To permit the opportunity for the development partners and other stakeholders to share their experiences, lessons and interest in geothermal development within the context of the Dominica Geothermal Energy Development Programme.

To dialogue and explore further together with the development partners on the way forward for enhancing the outcome of the Government’s development objectives for the geothermal energy programme.

To allow the development partners first-hand view of the works undertaken so far and to allow for greater practical feedback on proposed further development and the level of participation which could be afforded.

To foster greater alliances with regional and global agencies and institutions to pursue the use of geothermal energy to transform the national energy sector into an engine for breakthrough sustainable development and for addressing adaptation to climate change.

To create better understanding of the connection and complementary contribution of the geothermal energy programme to the clean and green image branding of the country’s, Nature Isle ecotourism product.

To create significant opportunities to promote clean economic growth and to promote the complementary contribution of geothermal energy to the clean and green branding to the Nature Isle ecotourism product.

To explore the possibilities and establish the right network and systems to trade the avoided carbon emissions gained from increased renewable energy use with the European Union (EU) and the United States (US) carbon markets. (Estimates place the potential value of the US and EU markets between USD 100 to 400 billion annually).

The Proposed Programme/Purpose

The proposed programme shall seek to at generate greater direct interest and participation in the development of the geothermal energy programme in Dominica to begin with the construction of the Small Geothermal Power Plant. Also to prove to the regional and international development partners that the Dominica’s geothermal energy development programme is a desirable and sustainable development initiative.

In so doing, the Government of Dominica shall embrace the golden opportunity to give the development partners a very clear picture of the current strong commercial viability of the geothermal programme. This includes giving a detailed account of the success stories of the Exploratory Drilling Project and key activities and strategic decisions along the way. Among the major highlights will consist of a presentation of the Situational (Gap) Analysis of the Geothermal Programme undertaken by the World Bank in collaboration with the Ministry of Public Works, Energy and Ports. The analysis has identified the stage of the Dominica Geothermal Energy Programme as one of high potential with low maturity and ranks Dominica higher in maturity than other countries in Latin America and the Caribbean, such as Nevis, Ecuador and Chile, among others.

In addition based upon the risk assessment, the analysis records Dominica’s position as Confirmation of Resource Stage and is currently at moderate project risk and will be moving on from moderate resource risk to low resource risk and finance risk upon the undertaking of the production drilling activity. It is very important therefore that we champion this achievement in order to gain greater widespread support and participation for realizing the desirable and sustainable socio-economic prospects of this programme.

Proposed Participants:-

The Forum will be attended by many of Dominica’s development partners from within the Caribbean region and internationally, including the EU, the OAS, the AFD, The Regional Councils of Guadeloupe and Martinique, the World Bank, JICA, Caricom, the OECS, and representatives from the Embassies of Venezuela, Cuba, and China.

Cost

Significant financial support is provided by the World Bank/SIDS DOCK project.

Venue

The Forum will be held at the Fort Young Hotel.

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